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What does the White Paper set out?

The Scottish Government's White Paper, "Choosing Scotland's Future: A National Conversation", was published on the 14 August 2007.

What does the White Paper set out?

The White Paper sets out the Scottish Government's three main ideas on how Scotland's constitution could change in the future:

Further evolution of devolved powers, extending them as and when the occasion arises

Enhanced or maxi-devolution, which would contain an extension of the current powers of The Scottish Parliament and Scottish Government, possibly including fiscal autonomy and

The preferred option of the current government, would be progress to the point of full independence for Scotland.

The White Paper sets out:

The current devolution settlement and how it works

The Government's vision for Scotland under enhanced devolution. Under the headings a wealthier, safer, fairer, healthier, greener, smarter and stronger Scotland

The Government's vision for an independent Scotland, including how the Scottish Parliament would work, the consequences of independence, negotiations with the UK Government, foreign affairs and defence

The Scotland Act (1998) was never intended to be a finite expression of Scottish devolution, it was written to encompass its evolution and contains measures to allow the original settlement to be changed through legislation. Provisions within the settlement would see powers transferred to the Scottish Parliament (and Government), after consultation between the UK Government and Scottish ministers and approval from both Holyrood and Westminster.

It is likely that given enough time the settlement would always have evolved without any specific legislative measures. Subjects such as climate change, which have arisen since the original Act and therefore are not reserved to the UK Government, would fall within the remit of the devolved administration. In fact powers have already evolved so responsibilities such as the construction, extention or operation of electricity-generating stations and functions relating to food safety standards have passed to the Scottish Government.

It could be argued that although a majority of the Scottish population are not in favour of independence, most people and indeed political parties in Scotland would like to see more powers devolved to the Scottish Government. There have been particularly high profile campaigns for this in specific areas such as dawn raids on asylum seekers and legislation on air rifles.

What some would claim has been the UK Government's "patchwork" approach to devolution with no overarching plan or compelling vision for the union, and no real concern given to intergovernment co-ordination have all brought Scotland to a situation where there is little if any support for the current status quo being maintained.

What is the Government trying to achieve?

As a Government document the White Paper breaks the mould as it puts forward ideas that are not just those of the Government that created it. For instance, although it is made clear in the White Paper that independence is the preferred option of the Government, it goes into some detail regarding the option of enhanced devolution. The White Paper has also made room to address some of the criticisms that could be thrown at it. It presents independence as the end point of devolution, which some may see as an attempt to take away any fear the Scottish public may feel at the idea of a complete and immediate break from the union.

The appendix to the White Paper contains the Referendum (Scotland) Bill and an example of a ballot paper for the referendum. Some believe that the Bill is unlikely to ever be tabled, with it being placed at the back of the paper as a panacea to placate traditional SNP supporters and fulfil SNP manifesto pledges, while achieving their real aim which is to kick start debate.

As a popular mandate will be needed to change the Scotland Act, the present Government's approach appears to be steering the population towards a climate of thought more hospitable to their aims.

How will it affect Scotland's relationship with England?

If Scotland's devolution was to either evolve into maxi-devolution or metamorphose into independence, Scotland's relationship not just with the UK but also the separate regions would be an important consideration. Any constitutional change in Scotland will have knock on effects in other parts of the UK. Few would deny that Scotland's relationship with England is important, not just from a historical point of view but also in relation to economic considerations. A large proportion of Scotland's tourist income comes from south of the border as well as many of the accounts held in Scottish banks.

It has been suggested that momentum for Scottish Independence could originate in England should political parties decided to harness what has been described as "latent discontent". Voters south of the border have become increasingly frustrated with a lack of answers or debate on the West Lothian question and perceived inequalities between the way Scotland and England are treated, a situation which started to germinate long before the devolution settlement with the introduction of the Barnett Formula, which was originally intended as a short-term measure. For more on the Barnett Formula please see previous Parliamentary E-bulletins.

Most surveys have found that English preferences for constitutional change almost exactly match the Scottish preferences although, partly due to under reporting in the media, devolution is not viewed in the same way on each side of the border.

What about Scotland's role within the EU?

Under the current devolution settlement EU policy is reserved to the UK, and to devolved administrations when devolved competences are implicated by EU law. There are specific inter-governmental procedures set out in a Memorandum of Understanding and a Concordat which includes:

The provision of information

Formation of a UK line

Attendance at Council

Implementing EU obligations and

Infraction proceedings.

There is an aim to have a single UK negotiating line in respect to Europe, however a leaked memo in 2006 implied that Scotland's EU voice was not being heard sufficiently loudly in either London or Brussels, and there are questions about whether the current set-up properly protect Scotland's EU related interests.

One ongoing dispute has been in relation to Scotland's fisheries interests, as Scotland has over 70 per cent of the UK's fishing industry, the SNP have in the past called for Scotland to be able to lead negotiations at an EU level.

Obviously with either enhanced devolution or independence the relationship Scotland holds with the EU would also fundamentally change. European experts have stated that more joined up thinking is needed, and that current structures do not adequately fit, mirroring others criticism that devolution has been approached in a "patchwork" way. It is thought that a new accord would have to be reached with the UK government specifically if the following areas gained more devolved power:

Direct taxation

Financial services

Energy

Employment law

Environment

Health and safety

Climate change

Competition policy

Consumer protection and

Any other areas where EU regulation is already extensive or growing.

Scotland's relationship with the EU would have to be further negotiated if the idea of independence came to fruition. It is unlikely that Scotland would have immediate membership of the EU, although it would not be obstructed or have to take a "back of the queue" place behind other countries wishing to gain membership such as Turkey.

Any separation from the UK Government would have to be "velvet" with them willing to champion Scotland's membership. It is thought that Scotland could expect to have a normal level of representation within the EU for a country its size, and this would come out of any UK representation.

What are the economic implications?

The White Paper makes no mention of any borrowing powers for an independent Scotland, however the biggest economic problem with independence is thought to be uncertainty. Past referenda in Quebec are often used as an example by those on both sides of the independence debate. Quebec undertook a referendum on independence in 1995. There was no discernable affect on the economy until about two weeks before when polling started to indicate that there might be a yes vote. These polling results were proceeded by a fall in the value of the Canadian dollar and stock market as well as individuals moving their bank accounts out of Quebec.

However Quebec was in a different economic position in 1995 to that which Scotland occupies now. Quebec had one fifth of the Canadian economy and a quarter of the population, so it does not necessarily follow that what happened economically in 1995 in Canada is necessarily going to apply to contemporary Scotland. Many feel it would be reasonable to assume that the uncertainty could affect the value of Scottish companies.

The SNP hopes for the future of the Scottish economy are set out in the White Paper as:

Devolution of taxation and spending responsibilities as a whole "fiscal autonomy" allowing the Scottish Government to design a business tax environment to encourage investment

There could be differing levels of fiscal autonomy, with full fiscal autonomy involving complete responsibility of every form of taxation within Scotland and enabling the Government to tailor taxation regimes and become fully accountable to the public

Devolving powers to do with company formation, regulation and insolvency would allow the Scottish Parliament and Government to respond to Scottish concerns

Devolving competition law means that Scotland could better reflect market needs and conditions

Scotland would have the ability to influence at EU level the financial services sector

Scotland could assume responsibility for oil and gas most likely along the Norwegian model of investing profits in a trust fund for the nation

It is a necessity that the UK has one currency. Scotland's joining the Euro would be dependent on a decision across the whole of the UK. Many feel that any separation from the UK Government would need to be a "velvet" divorce so as not to harm Scottish tourism, or prejudice customers of Scottish companies south of the border. European experts feel that the White Paper poorly informs the economic debate, and that much more data would be needed before any conclusions could be drawn.

What happens next?

Both the Scottish Conservatives and Liberal Democrats have expressed a desire to table a motion that would call the SNP's bluff and force them into a referendum now. As independence is currently only supported by a minority it would be likely that any referendum would fail, which the Conservatives and Liberal Democrats feel would leave the question to lie fallow for another generation. This possibly frees the Liberal Democrats from any previous reservations that impeded them from taking power by forming a coalition with the SNP.

However it is thought that holding a referendum now also runs the risk of normalising the idea of referenda, as has been seen in Quebec. It has been warned that already low voter turn out in Scotland could be further impacted upon by a badly timed vote.

There has as yet been no date set by the Scottish Government for a closing to the National Conversation, or to the tabling of a referendum bill, if one will be tabled.

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